-productivity firms in Switzerland. Innovation support sustains firms' R&D activities in both countries. Our structural growth model … identifies the impact of innovation, imitation and R&D costs on firms' R&D decisions. R&D costs gained importance in Switzerland … prioritize enhancing innovation and imitation success over cost reduction to boost productivity growth. …

, investment, research and development activities, innovation driven production cost reductions, measured performance and the …

effect on innovation. We develop a simple "trapped factor" model of innovation that is consistent with these empirical …